Sustainability Shift in China’s Supply Chain & Manufacturing

Understanding the sustainability landscape in China in recent years

For many manufacturers and supply chains, the swift change from previous decades of little to no environmental protection and enforcement, has resulted in many organisations in recent years, “been caught off guard by stringent and often drastic approaches to environmental regulation in China,” explains Greenment Environment.

However, while this is a big task for those in the industry to get their heads around, China’s regulations and enforcements surrounding the environment has shifted the country to a more dynamic and comprehensive approach of achieving environmental goals, and could develop greater supply chain transparency and sustainability.

“Many Chinese environmental policies since 2015, including the country’s Environmental Impact Assessment (EIA) process, have been designed to address the challenge: What else can be done if all companies have met discharge standards, but the environment is still deteriorating?,” adds Greenment Environment.

China’s Adoption of Environmental Impact Assessments 

While the use of environmental impact assessments (EIAs) have been formally conducted for large construction projects in China since the 1990s, “Political corruption - including bribery and graft - has been widespread and tackling this issue in the EIA approval process was an aspect of President Xi Jinping's anti-corruption campaign, which began in 2013,” says Greenment Environment. 

Amendments made to the Environmental Protection Law since 2015 have strengthened the enforcements at the province, municipality and county level. “In 2018, the Ministry of Ecology and Environment (MEE) issued a statement outlining its goal of curbing EIA violations and improving assessment guidelines,” adds Greenment Environment.

Without continually addressing and reducing environmental impacts, companies will fail to gain an EIA approval. Greenment Environment explains that organisations should focus on a more comprehensive and holistic approach that includes three dimensions:

1. Site: compliance with legal procedures and compliance of operational behavior
2. Environment: gauge regional sensitivity, environmental capacity, and objectives
3. Policy: industrial policies and planning, environmental policy, environmental protection infrastructure and industrial park planning

“Because each of the three dimensions has its own level of risk, risk levels can be classified according to the actual situation of the enterprise. Failure to manage all three dimensions increases business risk,” comments Greenment Environment.